GUWAHATI, Feb 22 � Issuing a caution note, the Income Tax Department has expressed serious concern over tax fraud resorted to by salaried employees and the claim of exemption made by members of Scheduled Tribes (ST) in the Northeast region.
The department claims that it has come across many cases wherein exemption is claimed by the members of ST without realizing that the benefit is admissible subject to certain conditions.
�There are many cases of ST, who claim exception running into crores of rupees under 10(26) of the Income Tax Act, in spite of them not meeting the exemption criteria. People should understand that there is no blanket exemption,� said RK Gupta, Chief Commissioner of Income Tax, NER, while talking to mediapersons today.
�There are deposits in banks in crores of rupees in the name of members of the Scheduled Tribe community and the persons do not reside in that area, nor does the area have potential to generate that type of income, which does fulfill the criteria of tax exemption,� he stated.
�The general perception is that in case of ST, no inquiry or details can be asked for, which is wrong. The claimant should be ST of the specified area, and is required to prove that he has earned the income from the specified area where he resides,� Gupta pointed out.
On tax fraud by salaried employees, Gupta said that an increasing number of tax-return-related scams of salaried employees have come to light and these often relate to claims under different sections on the Income Tax Act, 1961 under chapter-VIA such as Sec 80 GGA (donation for scientific research and rural development), 80G (donation to charitable institutions), etc.
�There have even been cases wherein persons had claimed 60 per cent of their gross salary income as deduction under Section 80GGA/80G, a situation which is clearly not possible. Many such cases have been identified by the IT Department and are presently under examination,� Gupta said.
�These people tend to claim bogus refund by obtaining false certificate of charity or donation. This is very rampant in Manipur and such cases have also been detected in other NE States, including Assam,� Gupta added, urging the salaried employees not to indulge in such unlawful practices, which otherwise may result in termination of their service, besides imposition of penalty.
Gupta also hinted on large-scale subsidy fraud indulged by various manufacturing units. Besides, he also expressed concern on rampant tax evasion and issues related to TDS.